Invest Georgia, the state’s endeavor into venture capital, announced Monday its pick for its first investment and the sector it chose really shouldn’t come as much of a surprise.
The state organization chose a fund operated by TTV Capital as its first investment, which will go to investing in young financial technology or “FinTech” firms. The $3 million commitment is nearly one-third of Invest Georgia’s initial allotment of $10 million.
The investment shows the rising prominence of the state’s payments industry.
FinTech has long been a powerhouse in Georgia, but it was often forgotten.
But in the past few years, in no small part to newly formed group called the American Transaction Processors Coalition, the industry has captured the attention of lawmakers eager to stimulate the economy and show their commitment to growing Georgia jobs.
About 70 percent of the debit, credit and gift card transactions in the U.S. each year are processed by companies with major Georgia operations, according to ATPC, and the industry employs more than 40,000 people in the state.
It also happens to complement other key Georgia industries, such as cyber-security, telecommunications and health care information technology.
In September, the Metro Atlanta Chamber and the ATPC formed a FinTech task force to create more high-tech jobs, attract talent and recruit companies. The state is also working on university curricula to aid in training students to work in the industry.
“We have made it clear to (state leaders) the two things needed for the industry are workforce development and innovation,” said H. West Richards, the executive director of ATPC.
The industry has generally high-paying jobs and its operations form the core of how money moves from consumers to businesses.
ATPC has pitched Gov. Nathan Deal, Lt. Gov. Casey Cagle and the state’s economic development agency on the importance of the industry to Georgia. The coalition has also made inroads in Washington, D.C.
Some of the state’s more notable job announcements in the past year have involved payments companies, such as Worldpay’s plan to add hundreds of jobs and move its U.S. headquarters from Sandy Springs to Midtown.
A knock on Georgia for years has been the lack of early stage investment capital for startup companies.
How consumers pay today — by and large with credit and debit cards — is likely to change in the years ahead as smartphones become more sophisticated and ingrained in society, and consumers do more of their buying online. That’s not to mention the potential of virtual currencies such as bitcoin.
And Georgia leaders want to make sure that its homegrown FinTech industry continues to innovate. Some of that will come from entrenched companies, but other technologies will come from companies that are young or don’t yet exist.
This decision by Invest Georgia puts resources into a new FinTech arena – the cultivation of startup companies. This time, Georgia and Georgia taxpayers will have a more pronounced stake in those companies’ futures and whether they succeed or fail.